Lyle & Anor v Bedborough & Anor (Rev 1) [2021] EWHC 220 (Ch) (08 February 2021)

Lyle & Anor v Bedborough & Anor (Rev 1) [2021] EWHC 220 (Ch) (08 February 2021)

The 2008 oral agreement did not create a constructive trust or alter beneficial interests in the property; the 2012 Declaration was a transaction at undervalue by Mr Bedborough within the relevant time under s339 Insolvency Act 1986 and is liable to be set aside. Mrs Bedborough did not provide consideration equivalent to the value transferred. Section 423 does not apply to the 2008 Agreement as there was no real and substantial purpose to defraud creditors at that time.

Citation
[2021] EWHC 220 (Ch)
Parties
Applicant: Duncan Lyle; Applicant: Nigel Fox; First Respondent: Jetson Ralph Bedborough; Second Respondent: Sara Evelin Bedborough
Jurisdiction
England and Wales
Judgment Date
08 February 2021
Procedural Posture
Insolvency Application / Judgment After Trial
Outcome
Application granted in part
Legal Topics
Transaction at Undervalue, Constructive Trust, Bankruptcy, Setting Aside Transactions, Beneficial Ownership, Section 339 Insolvency Act 1986, Section 423 Insolvency Act 1986
Insolvency Property Law Trusts Transaction at Undervalue Constructive Trust Bankruptcy Setting Aside Transactions Beneficial Ownership +2 more

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Parties

Duncan Lyle

Applicant

Nigel Fox

Applicant

Jetson Ralph Bedborough

First Respondent

Sara Evelin Bedborough

Second Respondent

Procedural Posture

Insolvency Application / Judgment After Trial

Legal Issues

  1. 1 Whether the 2008 oral agreement created a constructive trust altering beneficial interests in the property
  2. 2 Whether the 2012 Declaration was a transaction at undervalue liable to be set aside under s339 Insolvency Act 1986
  3. 3 Whether s423 Insolvency Act 1986 applies to the 2008 or 2012 transactions

Ratio Decidendi

The 2008 oral agreement did not create a constructive trust or alter beneficial interests in the property; the 2012 Declaration was a transaction at undervalue by Mr Bedborough within the relevant time under s339 Insolvency Act 1986 and is liable to be set aside. Mrs Bedborough did not provide consideration equivalent to the value transferred. Section 423 does not apply to the 2008 Agreement as there was no real and substantial purpose to defraud creditors at that time.

Court Disposition

Application granted in part

Orders

  • 2012 Declaration set aside as a transaction at undervalue under s339 Insolvency Act 1986
  • Consequential orders for possession and sale of the property